Oh hai, where's my money?

March 22, 2012 8:15 AM

I sold some items through a consignment shop that has now gone out of business. On the day I picked up my unsold items, they said they'd be distributing checks after the last day of operation. That was nearly three weeks ago. Would it really take this long, or did they just take my money and run?

Admittedly the amount I'm owed is small, but as someone who's really hurting for money, I can't let this slide. I've left phone messages and sent emails - no response whatsoever. What should I do now?

posted by never nice to grab bag (4 answers total)

Take them to Small Claims Court. This is what they're for.

And yes, businesses closing and not paying their vendors is a very common thing.
posted by inturnaround at 8:23 AM on March 22, 2012 [1 favorite]

"Gone out of business" means they have run out of money.

They probably owe a lot more money than just yours. To their landlord, the bank, the credit card company, their utility suppliers, their relatives, etc etc. If they somehow possibly manage to scrape up any cash from anywhere, it will go to those other people first, because they will be noisier than you could possibly be and some of them know where the owners live.

It's a very wise small business owner who sees their business going under and has the gumption to wind it up immediately, before they start borrowing money "just for a little while" and spending their customers' money on the rent.

I wouldn't waste your time.

If this happens again, when they say "oh, you can have your money after we close", tell them you need it now and you will be staying in their shop until they give you it.
posted by emilyw at 8:25 AM on March 22, 2012 [2 favorites]

Taking them to small claims court is only useful if:

The shop was something like a sole proprietorship, rather than an LLC or corporation, because there's a chance of recovering cash from the owner directly, or

You have reason to believe the shop has assets of any sort that could be used to pay you off.

Otherwise, the previous suggestion was correct, you can assume the money's all gone and the business folded poorly. If it hadn't, you'd have a check. You might have a check even so, but it might not be worth anything, so at least they didn't screw you with a NSF check to quiet you.

Otherwise, taking them to small claims will cost you fees and net you nothing, so you may wish to consider just writing it off.
posted by jgreco at 9:57 AM on March 22, 2012

I have the impression many consignment shops (if you own one, I'm not insulting you) do not have a profitable business model. They price clothes very high and never sell anything. It seems to be "retail therapy in reverse": the customers get told that their originally expensive clothes are still worth something (in the shops I've seen, half the original price, which is still very high for used clothes). They get to talk with the proprietor or sales staff. It's a cool business to run if you like to be around clothes and like talking to people, but don't expect to make a lot of money doing it.
posted by bad grammar at 5:38 PM on March 22, 2012